This module allows you to analyze existing cross correlation between Cadiz and Dominion Energy. You can compare the effects of market volatilities on Cadiz and Dominion Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cadiz with a short position of Dominion Energy. See also your portfolio center. Please also check ongoing floating volatility patterns of Cadiz and Dominion Energy.
Given the investment horizon of 30 days, Cadiz is expected to under-perform the Dominion Energy. But the stock apears to be less risky and, when comparing its historical volatility, Cadiz is 1.2 times less risky than Dominion Energy. The stock trades about -0.17 of its potential returns per unit of risk. The Dominion Energy is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 6,643 in Dominion Energy on June 20, 2018 and sell it today you would earn a total of 557.00 from holding Dominion Energy or generate 8.38% return on investment over 30 days.
Pair Corralation between Cadiz and Dominion Energy
Overlapping area represents the amount of risk that can be diversified away by holding Cadiz Inc and Dominion Energy Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy and Cadiz is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cadiz are associated (or correlated) with Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of Cadiz i.e. Cadiz and Dominion Energy go up and down completely randomly.
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